In 2006 average house prices in the UK rose by 9.3%

[Upwind]

From the BBC (clicky) :

"This represents a ?40 increase per day," said Fionnuala Earley, the Nationwide's group economist.

"The top three performers in the final quarter of the year were Northern Ireland, Scotland and London, but even the relatively weaker regions in the Midlands and North have seen a marked pick-up in house price inflation this quarter," she added.

I am fairly sure that average "house price" includes flats. Means that renting has effectively cost us 40 pounds a day, that is 14,600 pounds over the past year - I seriously think that if we cannot get acceptable rental housing or buy as our family grows we will be best off emigrating.

'I think that the average house price in Edinburgh is over £200,000 which is 10 times my full time salary'

I think it's now that.

We stopped caring and are just looking to leave.

The house prices are beyond ridiculous, there is a house for sale £140k in the town we are desperate to move to although we will never get a mortgage I just look. It is not worth it, why are people keeping this market afloat by buying houses at these prices.

Even ex-council houses are going for well beyond their worth. We should be able to buy an ex-council house which would be fine for us, but there are obviously a lot of people out there willing to pay well over the odds. Only the estate agents and banks are making money.

It is complete madness and if we had any money we would leave. But expats (not you epis!) have run the prices up everywhere!

And who is getting mortgages for these houses? Or is it all now rich mummies and daddies paying for their little darlings first pad?

I suppose it's low interest rates (historically), the fact more couples have two incomes, people with equity from previous houses, people inheriting from parents, people getting help from their parents and in some jobs big city bonuses too and foreign buyers in some bits of London.

Xenia - I am too young to remember but I am not sure about your point that "in some ways house prices and incomes have kept pace and it was a struggle in 1983 and is a struggle now."

DH's colleagues, who have similar salaries as him, were able to afford to buy decent family homes in the 1980's and 90's. Our parents had less education than us, and relatively less well paid jobs - they were still able to afford comfortable homes in okay areas. We can't and this thread shows we are not alone.

Maybe the difference is that where they struggled to buy family homes we would struggle to buy a one bed flat.

My dad was a teacher, could a young teacher afford to buy a family house today?

I am genuinely wondering what will happen.My younger brother is 26 and when he left uni he went back home and now he rents a room in a grotty house with his girlfriend and they pay a fortune(LOndon)But as time goes on he is going to want his own place as are many others of his generation and yet there is no way he could buy anything and even renting is a fortune.Eventually this must stop because soon there will be no one at the bottom end of the market apart from investors.

around here (herts) there is such a lack of affordable housing but there always seems to be room for new 4 bedroom detached houses and gated communities .

also i think stuff the green belt, people are more important than fields.

Actually I agree with Xenia. We got married in 1983 and were both on £3k a year. We'd saved £2k and needed £20K for our first house. The bank would only give you 2.5 times joint salary so we only got the mortgage because we'd joined their savings scheme and they had to.

that same house is now worth £150k and the equivalent salary is £16k each. If a couple saved the same proportion of money we did they would end up looking at a similar level of borrowing. (and I remember only too well when the interest rate went up every month and topped 15%)

And as someone who now looks out on a huge and noisy housing estate where until a year ago there were fields I'm a fervent supporter of greenbelt! Especially since we've lost all our water pressure so our shower no longer works thanks to the new development

bubble will burst soon - people are going bankrupt left, right and centre.

renting is very good value atm - we'll be watching from the sidelines when we follow America's lead and the housing market crashes.

6:20 looks a lot better to me than 32:150. about half as mucyh again better in fact.

Also while starting salaries are now a lot better than they were in 1983, middling wages haven't gone up quite so nicely (though top slaries have gone through the roof). I don't think you can say that 3k then is the equivalent of 16k now with quite as much confidence as you do.

But anyway - upwind, you haven't "lost" £40 a day because you haven't been paying mortgage interest. Lack of acceptable rented housing (if there is a lack) is another issue entirely. there are certainly plenty of decent rented houses in some parts of the country. think emigrating is rather an over-reaction.

sorry, 6:22 is better than 32:150.

I thought the figures looked wrong.It is v difficult to buy now An average house in Brighton is 300k and that is a smallish terrace with a patio but no garden or parking.Salaries here are lowish so people are unable to buy

Personal debt is ridiculously high, I agree. And individual insolvencies are up. I'll be interested to see what happens. (we're renting, hoping to buy in the next couple of years and prob can afford it).

Many people are living the high life on the equity in their houses which they are releasing and spending on disposable things like holidays etc.It is sold to us by the banks as free money almost but if house prices fall or interest rates rise there will be trouble.

SP I'm a civil servant (and was then) so I was comparing the salary for someone at my level and the same number of years service, which does equate to £16k. We'd also saved a huge proportion of our take-home pay as well, which narrows the margins (though I'll admit maths has never been my strong point).

One of the biggest differences now tho is that FTB are not leaving their parents homes to set up home together so probably haven't saved the large deposit we did- you couldn't do it if you were already renting. Plus people starting out with huge student loans.

Also we started out with everyone else's castoffs, from furniture to carpets and curtains. The only stuff we had new was what we got as wedding presents. We had a rented TV, no car and no extras. My cousin recently got married and expected everything brand new- you can't have everything.

SenoraPartridge - we have not been paying interest on a mortgage but have been paying a similar amount in rent. According to the figures the average property now costs 14,600 more than it did this time last year. If I was to by an average home now it would cost an extra 14,600. We do hope to buy eventually, so to my mind we have effectively lost that amount of money.

I don't think anyone has a right to own their own home but it is miserable having to rent indefinitely in the UK. It is not a good option with children - partly because all that is available are short assured tenancys that mean you have to move when your lease expires at the end of a year. That makes emigrating more attractive and we are seriously considering it.

exactly, Noddyholder and WWW. also, many buy-to-letters haven't done their sum properly and market will be flooded at next couple of interest rises.

people are using their equity to fund their lifestyle, crazy!

Sorry - standard tenancy agreements mean you might have to move e.g. if the landlord has a friend or family member who wants to rent the property as has happened to us.

Tallulah, fair points though kitting out a house with new stuff is relatively much cheaper now e.g. my toaster cost 4.50 new!

How long the stuff lasts is another question...

The maths are mad. We pay £850 a month rent for our house (3 bed) but to buy the same house would cost around £1.5k a month (at an interest rate of 5%). So on a buy to let basis in a lot of places the sums just wouldn't add up, unless a) you put down a large sum in the beginning and had a small enough mortgage that could be covered by the rent or b) unless you bought cash I suppose. Or if you didn't mind funing any shortfall because you're in it for the long term. But it was never the buy to letters who bought cash who were going to abandon the market, it's the ones with a low annual yield who may suffer at some point, esp from an interest rate rise.

I think we will buy at some point but my calculations will factor in being able to afford stupid interest rate rises because that's what stuffed a lot of people last time round. So I want to consider being able to afford twice the monthly repayments and how we'd survive on that basis.

yeah, WWW, we pay 950 pcm for our 3 bed, would cost about 1,600 pcm to buy, and that's just to service the mortagage, not even making repayments! plus maintenance too, of course.

would much rather have equity stashed away and buy when the bubble has popped!

Interesting that talullah's calculations are the smae as mine. I was fascinated by those sums because if I asked I would have said a terraced house in that part of outer london would have been much much higher in price compared to those salaries and yet on those sums it wasn't.

"My dad was a teacher, could a young teacher afford to buy a family house today?"
Well my ex was a teacher on the £7,500 in 1983 and we had my salary too which then was about the same and the house cost £40k. He had had a house before and I had some savings. We had been saving quite hard. I imagine the mortgage was 3 x joint salary in those days which is about £40k ish so we probably borrowed a bit less than maximum. Teacher around there in his position now may be on £30k? May be more, not sure. So imagine two teachers on that £60k x 3 times salary is £180,000 add in some savings and yes they are not that far short of the £230k price, and interest rates are very low now (not sure what they were then) and more interest only mortgages (risky but people do it to get on the ladder) so actually in that bit of outer london which is not Chelsea or Ealing or anywhere popular particularly, it is possible still.

One interesting difference now is student debt. That causes graduates to have that debt to be rid of too which makes things harder if they have the debt. Some work etc.

I am not trying to denigrate how hard it is to buy somewhere. I have found that the easiest money we ever made over 25 years was buying as much as we could possibly afford stetched as far as we might and over that period on average made more than our incomes.

Will be interseting to see what my 3 older children buy if anything and when. I've heard one say people don't buy until they marry. I'm not sure it's wise to wait and then her friend just bought a house in Chelsea, renting it out so the interest is covered for now, wise wise boy.....

Agree with you Upwind, prices are crazy for so many reasons, landlords who have bought recently where we are are not covering their costs (I recently worked out a 200 pound a month shortfall on one house and that excluded all purchasing and upkeep costs and the lost interest on the deposit) they seem to be relying solely on appreciation. My "take" on things is that availability is poor because many people can't afford to move up. The prolonged cheep finance hasn't helped (a few more swift interest rate rises are possibly coming) which has lead to people financing their living costs off their mortgage. The tax position for owning multiple homes is also favourable. There were changes in the law making it easier to regain possession (also giving tennants some protection) which helped BTL expand. There is also a lot of rental availability where we are. I could go on!
Dinny wouldn't like to hazard a guess on when this bubble is going to pop would you?
Xenia by my sums your teacher couple are about 50K short.
On a slightly separate note just about every financial advice column I have read recently features people who own more than one property the advice seems to invariably be to sell it and two featured teachers earning 40K and 50K (making me think I'm in the wrong job!)

upwind - I do know what you mean about shorthold tenancies - it's a bugbear of mine too. I just think that saying you've lost 40£ a day is a bit like saying you've lost 10k because you didn't invest 100k in the stock exchange this year, that's all. And it's happening everywhere too: I couldn't afford to buy a house here either(in non-expat-hotbed Spain)

Senora Partridge - point taken

I do hope things will change here but if it does e.g. house prices go backwards as suggested by other people on this thread, recent buyers may feel as rueful as I do now!

Swings and roundabouts though Upwind. Personally I'm so desperate for a house (or flat) that it is really beginning to affect my quality of life. We too have been discussing leaving. A lot of people now are stuck where they are because they can't afford to hike their mortgage to move up a step even with a big dollop of equity. That is the real supply problem (coupled with lots of 2bed 2bath BTL rather than homes being built especially in the cities). We'll have to see what the MPC do in Feb.

Found this.

Pricedout.org.uk; Would you be priced out?

If you've been in the housing market a while, see if you could have afforded your first house at today's prices and pay rates.

Personally I've had enough of hearing "I've missed the boat" by not buying when houses were cheap. I'm 26; when houses were cheap(er) I was at school and uni. You might be able to get an mortgage on the strength of a weekend job at McDonalds right now (as long as you nod, wink, and tell the lender you're a chartered accountant on £35,000) but you couldn't back then.

If prices drop, we'll buy. If they don't, we'll emigrate. I've had enough of this insanity.